Small businesses are the backbone of our economy, and their diversity is astounding. At Unbroker, we’ve seen firsthand how various small business industry types contribute to local communities and the global marketplace.
From service-based enterprises to retail shops, e-commerce platforms to food and hospitality ventures, the options for aspiring entrepreneurs are vast. In this post, we’ll explore the different types of small businesses and help you understand the unique characteristics of each industry.
What Are Service-Based Small Businesses?
Service-based small businesses form the backbone of local economies. These enterprises offer specialized skills, expertise, and labor to meet the needs of individuals and other companies. The market has seen a significant increase in service-based businesses, and for good reason.
Professional Services: The Knowledge Economy
Professional services (accounting, legal advice, and consulting) constitute the core of the knowledge economy. These businesses thrive on expertise and client relationships. The services market is anticipated to show an annual growth rate (CAGR 2024-2029) of 5.62%. The American Institute of CPAs reports that participating firms showed a median growth rate of 9.1% in net revenue over the previous year.
Starting a professional service business often requires specific qualifications and licenses. The overhead can be low, especially when operating from a home office. Success in this sector hinges on networking and reputation. Professionals should join local business groups, attend industry conferences, and consider partnerships with complementary services to expand their reach.
Personal Services: Meeting Individual Needs
Personal services cater directly to consumers, including hair salons, fitness studios, and cleaning services. The Cosmetics market in the United States is projected to amount to US$21.45bn in 2025. These businesses often require a physical location and equipment, which increases initial investment.
To stand out in the personal services sector, businesses must create unique experiences. Some hair salons now offer VR consultations for hairstyle choices. Fitness studios incorporate technology like AI-powered workout plans. The goal is to provide value that ensures client retention.
Tech Services: Meeting Digital Demands
Technical services (IT support, web design, and SEO) are in high demand as businesses increasingly rely on digital infrastructure. The Bureau of Labor Statistics projects a 5% growth in computer and IT occupations from 2019 to 2029, faster than the average for all occupations.
To succeed in these fields, professionals must commit to continuous learning. They should stay updated on the latest technologies and techniques. Some IT firms now provide monthly cybersecurity packages to small businesses, creating steady income streams through subscription-based services.
Home Services: Essential Expertise for Property Maintenance
Home services (plumbing, electrical work, and landscaping) remain essential for homeowners and property managers. The home improvement market is expected to reach $620 billion by 2025 (Statista). This sector offers stability and growth potential for skilled tradespeople.
Professionals in this field should consider offering subscription-based services for regular maintenance to create consistent income. They can also differentiate themselves by adopting eco-friendly practices or specializing in smart home technologies.
Service-based businesses offer flexibility and the opportunity to leverage personal skills. Whether you’re a seasoned professional or just starting out, there’s likely a service niche that fits your expertise. In the service industry, reputation is the most valuable asset. Exceptional quality delivery will turn word-of-mouth referrals into your most effective marketing tool.
As we transition from service-based businesses, let’s explore another vibrant sector of the small business landscape: retail and e-commerce. These businesses bring products directly to consumers, both in physical stores and through digital platforms.
How Retail and E-commerce Businesses Thrive
Retail and e-commerce businesses form a dynamic sector of the small business landscape, offering diverse opportunities for entrepreneurs. These businesses bring products directly to consumers through physical stores, online platforms, or a combination of both.
Brick-and-Mortar Stores Evolve
Traditional brick-and-mortar stores, including boutiques and specialty shops, continue to play a significant role in the retail ecosystem. Despite the rise of e-commerce, physical stores still account for 81.6% of total retail sales.
To compete in today’s landscape, physical stores must create unique experiences. Some boutiques incorporate augmented reality (AR) technology to allow customers to virtually try on clothes. Others host in-store events or workshops to build community and drive foot traffic.
Online Stores Rise
E-commerce has experienced explosive growth, especially in recent years. E-commerce sales in the U.S. have seen significant growth, with sales values roughly doubling between 2019 and 2024. This trend has opened up opportunities for entrepreneurs to start online stores with relatively low overhead costs.
Dropshipping has become a popular model for online retailers. This approach allows store owners to sell products without holding inventory, reducing upfront costs and risks. Platforms like Shopify have made it easier than ever to set up an online store, with over 1.7 million businesses using their services as of 2021.
Handmade goods have also found a thriving marketplace online. Etsy, a platform specializing in unique and handcrafted items, reported 4.3 million active sellers in 2020, a 64% increase from the previous year.
Hybrid Models Power Growth
Many businesses adopt hybrid models, combining the strengths of both physical and online retail. This “click-and-mortar” approach allows retailers to leverage the convenience of online shopping while still providing the tactile experience that many customers crave.
Some retailers offer “buy online, pick up in-store” (BOPIS) options, which grew by 208% during the pandemic (according to Adobe Analytics). This model provides convenience for customers and drives foot traffic to physical stores, potentially leading to additional sales.
Subscription Box Services Expand
Subscription box services have emerged as a unique retail model, offering curated products delivered regularly to customers. This sector has seen significant growth, with the global subscription box market expected to reach USD 116.2 Billion by 2033.
Successful subscription box businesses focus on niche markets and personalization. For instance, Stitch Fix uses AI algorithms to curate personalized clothing selections for its subscribers, while Birchbox focuses on beauty product samples.
Starting a retail or e-commerce business requires careful planning and execution. Entrepreneurs must consider factors such as inventory management, shipping logistics, and customer service. For those looking to sell their retail or e-commerce business in the future, platforms like Unbroker offer transparent, low-cost options that eliminate high brokerage fees.
As the retail landscape continues to evolve, the food and hospitality sector presents another exciting avenue for small business owners. From cozy cafes to innovative food trucks, this industry offers a unique blend of creativity and service.
What Makes Food and Hospitality Businesses Unique?
The food and hospitality industry combines creativity, service, and entrepreneurship. This vibrant sector offers diverse opportunities for business owners who innovate and adapt to changing consumer preferences.
Restaurants and Cafes: The Heart of Local Communities
Restaurants and cafes define neighborhoods as social hubs. The restaurant and foodservice industry surpassed $1 trillion in sales for the first time in 2023, and is projected to do so again in 2024. This growth presents opportunities and intense competition for entrepreneurs.
To stand out, restaurants must create unique dining experiences. Farm-to-table concepts have gained popularity. Restaurants can partner with local farmers or start small gardens to supply fresh produce.
Technology reshapes the restaurant landscape. A robust online ordering system can significantly boost sales.
Food Trucks and Catering: Flexibility Meets Flavor
Food trucks and catering services offer lower startup costs and greater flexibility than traditional restaurants.
Success in this space often comes from specialization. Food truck owners should focus on specific cuisines or dishes that set them apart. (For example, a food truck specializing in gourmet grilled cheese sandwiches in Portland, Oregon, expanded from a single truck to a fleet of three and a brick-and-mortar location in just five years.)
Catering businesses can tap into the growing corporate event market. Offering specialized menus for dietary restrictions or themed events can provide a competitive edge.
Bakeries and Specialty Food Shops: Crafting Culinary Experiences
Bakeries and specialty food shops cater to consumers’ growing interest in artisanal and gourmet products.
To thrive, bakeries can focus on niche products or dietary trends. (A Chicago bakery specializing in gluten-free and vegan treats saw a 300% increase in online orders during the pandemic by leveraging social media marketing and offering nationwide shipping.)
Collaborations can drive growth. A Vermont cheese shop partnered with local wineries to offer virtual tasting events, resulting in a 25% sales increase and an expanded customer base beyond their local area.
Bed and Breakfasts, Small Hotels: Personalized Hospitality
The rise of experiential travel has created opportunities for unique, personalized accommodations.
Success often comes from creating distinctive experiences. A Maine bed and breakfast transformed a lighthouse into a unique lodging option, resulting in a 90% occupancy rate during peak season and features in several travel magazines.
Technology can streamline operations and improve guest experiences. A property management system can reduce administrative tasks by up to 40%, allowing more time for personalized guest interactions.
To boost profits in the food and hospitality industry, businesses should focus on creating unique experiences, leveraging technology, and adapting to changing consumer preferences. Some B&Bs have found success by introducing dining options to create new revenue streams that appeal to both guests and the local community.
Final Thoughts
Small business industry types offer diverse opportunities for entrepreneurs. Service-based businesses leverage expertise, retail and e-commerce ventures bring products to consumers, and food and hospitality enterprises create memorable experiences. Success depends on selecting a business model that aligns with your passions, skills, and market demands.
Thorough market research and a solid business plan are essential for aspiring entrepreneurs. Identifying a niche, providing exceptional value, and building strong relationships with customers and the community often lead to success. Adaptability in the face of changing consumer preferences and technological advancements is also key.
When you’re ready to move on to your next venture, consider leveraging platforms that support your exit strategy. Unbroker offers a modern approach to selling businesses, providing transparent, low-cost options for both hands-off sellers and DIY entrepreneurs seeking expert support.
